Termination of ABC’s Managing Director – Potential Legal Claims

The recent crisis plaguing the ABC following the shock sacking of managing director, Michelle Guthrie, has thrown the spotlight on some important considerations that employers must keep in mind when terminating the employment of senior executives.

If you’ve been following the dramatic events at the national broadcaster, you will know that Ms Guthrie has engaged a leading Sydney barrister, and there are hints of impending legal action to be taken by Ms Guthrie against her former employer.

The most common claim brought by employees against their employers following termination of employment is an unfair dismissal claim under the Fair Work Act 2009(Cth). However, most executives are excluded from making an unfair dismissal claim as they do not to meet the threshold requirements to bring a claim: You must earn less than $145,500 per year (as of 1 July 2018, this figure is adjusted annually on 1 July), or be covered by an award or agreement.

Ms Guthrie is no exception. Her annual salary of close to $900,000 puts her well above the threshold amount, which rules out unfair dismissal as a potential course of action.

If Ms Guthrie can prove that the ABC breached a term of her employment agreement, either express or implied, she could bring a common law claim for breach of contract. Although, with both parties now in damage control mode, it is difficult as an outsider to ascertain the basis for this type of action.

Some commentators are speculating that Ms Guthrie might argue that her termination as managing director was in breach of the general protection provisions under the Fair Work Act. These are becoming a much more popular avenue for redress by executives, as unlike unfair dismissal claims there is no remuneration thresholds, and they are generally more cost effective than a common law claim for breach of contract. The court also has very broad powers to remedy the prohibited conduct, and can order compensation, penalties and reinstatement.

To bring a ‘general protections claim’ Ms Guthrie would need to show that the ABC took adverse action against her because she exercised a ‘workplace right’. The definition of ‘workplace rights’ is broad and captures complaints in relation to employment. The resignation of ABC’s chairman, Justin Milne following allegations that he pressured Ms Guthrie to sack leading ABC journalists, has led some commentators to hypothesise that Ms Guthrie complained about Mr Milne’s conduct (and in doing so, exercised a workplace right), and because of this complaint, she was terminated from her employment.

The Fair Work Act also prohibits an employer from taking adverse action against an employee because of protected grounds, such as the person’s age or sex. If Ms Guthrie alleges she was discriminated against, she could bring a claim for discriminatory adverse action under the Fair Work Act. Alternatively, she could bring a claim under the state/territory or federal anti-discrimination legislation.

It remains to be seen how this saga will play out, and what actions, if any, Ms Guthrie may take against her former employer. But one thing is for certain, the employment team at Rankin Business Lawyers will be keeping a close eye on this very public dispute.